Compliance
Nasdaq CEO Adena Friedman Advocates for Tokenization to Release Trapped Capital
At Ripple’s Swell conference, Nasdaq CEO Adena Friedman highlighted a significant issue in Wall Street's operations: a substantial amount of capital is currently immobilized within clearinghouses and traditional brokerage systems. She argued that tokenization could effectively free up this trapped capital, making assets more liquid and facilitating faster transactions.
Friedman pointed out that the cash currently held as collateral during trade settlements remains idle until the settlement process is complete. By adopting digital assets, she believes that tokenized securities can streamline this process, allowing for quicker movement of collateral and faster payments.
In September 2025, Nasdaq took concrete steps towards this vision by filing a proposal with the SEC to enable trading and tokenized settlement of equities and ETFs on its primary markets. This proposal aims to maintain the existing settlement infrastructure through the Depository Trust & Clearing Corporation (DTCC), while also introducing the option for settlement to be directed to digital wallets.
Furthering this initiative, Nasdaq introduced an equity token design framework in March 2026, which emphasizes issuer choice and regulatory equivalence. This framework allows companies to determine how their shares are tokenized while ensuring that tokenized shares adhere to the same regulations as traditional ones.
Friedman's advocacy for tokenization reflects a broader trend towards integrating blockchain technology into mainstream finance, moving beyond its cryptocurrency roots. She has consistently described tokenization as the next major innovation in securities markets, with potential benefits for institutions that currently post collateral and await settlement.
However, the success of these initiatives hinges on regulatory approval and the practical implementation of tokenized shares that offer the same investor protections as traditional assets. Market participants are advised to monitor the SEC's response to Nasdaq's proposals and the evolving landscape of blockchain in regulated securities markets.
FAQ
What is the main issue highlighted by Nasdaq CEO Adena Friedman at the Ripple’s Swell conference?
Adena Friedman pointed out that a significant amount of capital is immobilized within clearinghouses and traditional brokerage systems, which could be released through tokenization.
How does tokenization aim to improve capital liquidity according to Friedman?
Tokenization can free up trapped capital, making assets more liquid and facilitating faster transactions by allowing quicker movement of collateral and faster payments.
What steps has Nasdaq taken towards implementing tokenized securities?
In September 2025, Nasdaq filed a proposal with the SEC to enable trading and tokenized settlement of equities and ETFs, while maintaining existing settlement infrastructure.
What is the purpose of the equity token design framework introduced by Nasdaq?
The equity token design framework allows companies to choose how their shares are tokenized while ensuring compliance with the same regulations as traditional shares.
What are the potential challenges facing the implementation of tokenized shares?
The success of tokenized shares depends on regulatory approval and ensuring that they provide the same investor protections as traditional assets.